UK’s FTSE 100 hits 6-week high as metal miners shine

By Shashwat Chauhan and Shubham Batra

(Reuters) -Britain’s FTSE 100 hit a six-week high on Friday boosted by solid gains in metals miners, while markets cheered after Federal Reserve Chair Jerome Powell acknowledged progress in lowering inflation, keeping alive hopes that interest rates have peaked.

The benchmark FTSE 100 share index rose 1.0%, hitting its highest level since Oct. 19, and the more domestically-focussed FTSE 250 midcap index also added 1.0%.

A private survey showed China’s factory activity unexpectedly expanded in November, pushing China-exposed miners 4.5% higher. [MET/L]

Precious metal miners added 2.8%, tracking a rise in precious metals prices. [GOL/]

Powell’s acknowledgement that U.S. inflation averaged 2.5% over the six months ending in October, near the Fed’s 2% target, and that monetary policy was slowing the economy as expected, boosted the gains for the two major UK indexes.

“I expect them (the Fed) to continue to send messages that they don’t think the inflation fight is over. But I’m not sure their actions are going to match the rigor with which they complain about the inflation fight,” said Rick Meckler, partner at Cherry Lane Investments.

Both indexes posted monthly gains in November on hopes that major central banks were nearing the end of their interest rate hikes.

Among other movers, shares of real estate, real estate investment trusts and homebuilders rose between 1.7% and 2.0% on Friday.

Mortgage lender Nationwide said British house prices rose unexpectedly in monthly terms for the third time running in November, adding to signs that the housing market downturn has abated.

Meanwhile, a final reading of the November S&P Global/CIPS manufacturing Purchasing Managers’ Index (PMI) came in at 47.2 against expectations of 46.7.

Antofagasta and Anglo American jumped 6.2% and 7.9%, respectively, after UBS upgraded the miners to a “buy” rating.

Ceres Power Holdings fell 7.2% after the clean energy tech developer said that an agreement with a new licensee was unlikely to be signed.

(Reporting by Shashwat Chauhan, Shubham Batra and Medha Singh in Bengaluru; Editing by Rashmi Aich and Eileen Soreng, Kirsten Donovan)